COLORADO LEGISLATIVE STRATEGIES NEWSLETTER

Introduction
“I guess I’ve been working so hard, I forgot what it’s like to be hardly working.” 
-Michael Scott
 
Well, everyone… after nearly three years of collaborating with Andrew every week on our CLS newsletter, the day has finally come — the torch of writing our introduction section has officially been passed to me. I'd be remiss to depart from Andrew's famous tradition of fun facts to start every newsletter each week. So, to add my own flair I've decided to start each newsletter with a quote to summarize the week, and fun facts with the quote.
 
As we approach a highly likely special session, it felt appropriate for this week's newsletter to open with a quote about hard work by none other than Michael Scott from The Office. Even if you haven't watched the show, it's inevitable that you've seen clips or memes from the show while scrolling social media. The Office follows Michael Scott and his employees at Dunder Mifflin, a paper company in Scranton, Pennsylvania. 
 
The series ran from 2006-2011 and is considered one of NBC's most popular comedy series in network history, alongside Saturday Night Live, Friends, and Seinfeld. Even though the show ended almost 15 years ago, The Office is one of the most streamed shows of all time with over 57 billion minutes watched when the show was available on Netflix. 
 
The show was so popular that it received product placement deals in episodes from several companies, including Staples – despite Staples being Dunder Mifflin’s competitor in the show. Chili's, on the other hand, originally had concerns over how the restaurant was portrayed when featured in one of the earlier (and most memorable) episodes. In the episode, the office awards ceremony called the “Dundies” is hosted at a local Chili's. At the Dundies, Pam, a main character played by Jenna Fischer, has one too many margaritas and her character is banned from Chili's. Eleven years later, Pam and Chili’s buried the hatchet, and Fischer reprised her role as Pam for a promotional campaign with Chili's to commemorate the episode. 
 
In the wise words of Michael Scott, everyone at the Capitol has been working so hard in the interim, it's hard to remember an interim without a special session of hardly working. And given the uncertainty of a special session, a Chili's margarita this weekend doesn’t sound half bad.
 
Wednesday’s Executive Committee of the Legislative Council Meeting
 
On Wednesday, the Executive Committee of the Legislative Council convened to review several presentations related to the impacts to Colorado of the federal “One Big, Beautiful, Bill Act,” also referred to as HR1. As a reminder, the Executive Committee is composed of Majority Leadership in both chambers, and the Minority Leaders from both chambers. The committee heard detailed presentations from the Governor’s Office of State Budget and Planning (OSPB) and Legislative Council Staff (LCS) to update from the June Budget Forecast accounting for OBBB. To put it lightly, Colorado’s already dire budget situation just became much, much worse.
 
Both presentations project state revenue to fall about $1.2 billion short of what had previously been projected for this fiscal year. To be clear, this is not to be confused with the previous billion dollar shortfall the legislature dealt with earlier this year, which was caused by increasing costs for already planned spending, particularly in Medicaid. The most recently developed shortfall is a reduction in what the state has available to spend. 
 
Although both presentations agreed there will be an overall hit around $1.2 billion, OSPB and LCS differed in how we get to that number. In the OSPB presentation, it was predicted that the state’s corporate income tax revenue could see a reduction of up to $950 million. However, LCS predicted less of an impact from corporate income tax revenue reductions, and a greater impact to state revenue from reductions in individual income tax. 
 
In terms of closing the gap, OSPB indicated state agencies across the board have been directed to come up with 2.5 percent reductions in operating expenses, and even floated the idea of tapping into the state’s reserve, although it would pose substantial risks. Colorado is required to maintain reserves equal to 15 percent of general fund spending, and if the legislature dips into the reserve to cover the newest budget deficit, the reserve would be brought down to just 9 percent. If the legislature were to take this route, OSPB cautioned that the state wouldn’t have enough in the reserve to deal with even a moderate recession.
 
All that being said, there are politics at play here that’ll set the scene for a special session. Democrats have been extremely vocal in blaming the Trump Administration for another $1 billion hole in the state budget. They are especially focused on pointing at businesses not paying their fair share because of the corporate income tax reductions included in OBBB. Republicans have been equally as vocal, reiterating similar messaging from earlier this year that Democrats have overspent in Colorado for years, and this is a self-inflicted problem. 
 
You might be wondering where the Joint Budget Committee (JBC) is during all of this. Minority Leader Pugliese also raised this question during the Executive Committee meeting, but the only explanation offered was that the numbers had only recently been finalized. Speaker McCluskie also expressed the importance of leadership involvement alongside the JBC. However, JBC members have expressed individual frustration of not being included in the discussions in the press, on social media, and in their respective caucus meetings. 
 
On the note of the JBC, keep in mind midterm elections are next year. JBC Chair Sen. Jeff Bridges is running for State Treasurer; JBC Vice Chair Rep. Shannon Bird is running for CD 8 (one of the country’s most competitive congressional districts); and JBC ranking Republican Sen. Barb Kirkmeyer is rumored to be running for Governor. As of right now, all three JBC members have to win a primary for their respective spots on the ballot in the general election. And, each of the three primaries has at least one other current, non-JBC lawmaker also in the running. In addition, Rep. Emily Sirota has announced she will run for the Senate.
 
In other words, three JBC members are in the tough position of being responsible for making very difficult cuts, less than one year out from primaries. Especially when all the “easy” cuts were made last time around, this $1.2 billion deficit will be much more difficult to fix and the cuts will be more consequential. Please see below for slide decks from OSPB, LCS, and other individual department presentations from Wednesday’s meeting. 
 
Executive Committee H.R. 1 Presentation - OSPB
LCS June 2025 Forecast Updated with OBBBA Fiscal Impacts
LCS July 2025 Executive Committee Slide Deck
Executive Committee H.R. 1 Presentation - HCPF
Executive Committee H.R. 1 Presentation - DOI
Executive Committee H.R. 1 Presentation - CEO
Executive Committee H.R. 1 Presentation - CDHS
 
Artificial Intelligence 
 
It’s still very possible Governor Polis will include Artificial Intelligence (AI)  in his call for a special session, given that Senate Bill 205 is set to go into effect in February, 2026. If it ends up being included, we could see several attempts at a compromise or “fix” to Senate Bill 205 which may include delaying the implementation date to continue to work on the unresolved problems of the law. That being said, it’s still uncertain whether AI will be included in the special session. If it’s not, that gives the General Assembly less than a month to address concerns from across business sectors related to implementation when they come back in January. 
 
Conclusion 
 
Keep an eye out for more information as we receive it related to a special session. Although the rumors of a starting date change by the day, the most recent possible dates we’ve heard are that the start date will be in the August 21-28 timeframe with August 25 being the most often start date mentioned
 
And in the meantime, feel free to use the looming special session as an excuse to take a page out of The Office playbook and enjoy a Chili’s margarita (or any margarita) this weekend.